China factory profit growth slows, reinforcing signs of fragility in economy

BEIJING (Reuters) - China's industrial profit growth slowed in the first nine months, reinforcing signs of fragility in the world's second-largest economy, as factories struggled with falling prices and softening domestic demand.

Industrial companies made a combined profit of 4.37 trillion yuan (S$910 billion) between January and September, up 7.9 per cent from a year earlier, the National Bureau of Statistics said on Tuesday. That compares with a 10 per cent rise in the first eight months.

The slowdown was partly caused by a special levy on the incomes of some oil and gas firms, which led to a write-down of profits, He Ping, an official at the bureau's industrial department, said in a statement.

Chinese manufacturers have been struggling with falling factory-gate prices as demand weakens. China's producer price index (PPI) fell 1.8 percent in September from a year earlier, its 31st consecutive monthly decline.

China's annual economic growth slowed to 7.3 percent in the third quarter, its weakest pace since the global financial crisis.

Industrial profits in September edged up 0.4 percent from a year earlier, compared with a 0.6 percent decline in August.